The Big Picture examines what it is to be human and how this is manifested in personal activities, relationships and wider society. This blog uses historical and current events to illustrate principles discovered in the course of working on a Taxonomy of Human Elements in Endeavour (THEE). Its range of topics touches on items distributed amongst the social sciences. Post material currently covers politics, communication, managing achievement, social interaction and more.

The words of former U.S. President Clinton’s campaign strategist, now famous, were originally meant as a quick synopsis to Clinton campaign organizers of how Clinton’s campaign should be approached.

Why? That’s political policy that really affects people—and a smart politician knows it. Campaigns based on regulating morality in society have come and gone and social values dictated what was and wasn’t acceptable regardless of their pleas. Campaigns around nationalism or the mutual hatred of some other group can be successful, but usually leave a bad taste in the mouths of the electorate.

Campaigns around the economy—and more specifically—what politicians plan to do with/about the economy is perhaps the only time the rubber finally meets the road.
I’ve addressed this issue in my most popular blog to date, “The Economic Role of Government” but I thought some clarification might be in order as I think the takeaway of that blog might seem to be: “Intervene in the economy? Bad idea.”

This might be a good default position for any government to take if they don’t know what to do, but let’s be honest: even in the most libertarian society in the world, power-centered politicians will likely never be able to keep their hands off their respective national economies. Furthermore, government intervention, though wildly complicated and highly volatile, is absolutely necessary at times. Let’s see if we can figure out how this can best be approached.

So, first off, the economy as a unified entity is an abstraction. Really, it is simply the result of many individuals and organizations being productive. So if a government is going to step in and intervene with an economy, they’re actually intervening with people’s enterprise or the results of their hard work.

Governments rely on a productive population for their very survival. So it is in any government’s best interest to, first, affirm that it values commerce, business, and enterprise. This can be done simply by politicians making speeches in which they say that they (and the government/people they represent) do indeed recognize the value of commerce. Easy enough, but do they mean it? That’s important.

I think we can all agree that there must be laws, and the laws must be enforced. We can’t have monopolies, we can’t have people not honoring contracts, we can’t have price gouging, we can’t have businesses cooking the books, we can’t have people exploiting other people, Ponzi schemes, false advertising, dishonest sales pitches, dangerous products, etc, etc, etc.

The problem governments run into at this level is making laws that favor their buddies—most of which are extremely wealthy campaign contributors. There should be laws against that sort of thing as well. But that’s a difficult law to get through as it directly and negatively affects those who make the laws. It’s a bit of the old snake eating its own tail sort of thing.

Beyond that, (and I mentioned this in “The Economic Role of Government”) certain members of society must actively promote the value of capitalism and its central role in prosperity, which, after all, is just another word for the accumulation of assets that can be converted into money (capital). But this might not be such a function of government as much as it a function of parents, teachers, opinion leaders and the like.

Furthermore, governments must look out for the interests of its people—both individually and the organizations that facilitate economic activity, otherwise known as domestic industry. They must listen to the concerns and grievances of their people and act on them. This is difficult in many ways and it brings us to a sort of important tangent:

Most often the issue of how a government can or should intervene in the economy arises in times of economic crisis. Otherwise, not many people care. They’re prosperous, things are working, people are happy and politicians are patting themselves on the back. Unfortunately, during times of crisis, people start looking to government for quick, decisive action. A great example of this might be the Occupy Wall Street protests in America:

Bad business practices, speculative bubbles and good old-fashioned greed had dealt a painful blow to the U.S. economy. People were angry, they protested, they broke windows and yelled a lot of rhyming slogans at tall buildings. Regular people didn’t know what was going on and politicians, who saw an election year on the horizon, got nervous. In an effort to appease the restless masses, politicians quickly proposed possible solutions, such as cranking up taxes for rich people, adding a tax to every Wall Street transaction, stiff regulation on banks and various other ill-conceived and poorly thought-out solutions—not to mention they called out their paramilitary police forces and started beating people.

This is most commonly where things go wrong in governments’ attempts at economic intervention. Crisis equals panic and everything is ignored except the attitude of: “Do whatever it takes to calm those people down.”

When this happens, it might be less helpful to listen to the angry masses and more helpful to enroll the services of outside, objective, nonpartisan, intelligent people who don’t have a stake in crony capitalism or the approval of the angry masses. This might include academics, intellectuals, economic analysts, think tanks, social critics, and researchers. There needs to be room for voices of dispassionate reason in all the madness.

This, however, is like finding an objective jury for a high-profile case and there is a tendency for even dispassionate people to become politicized.

Finally, governments must face up to the fact that they can’t control everything. Hurricanes barrel through metro areas, trading partners’ governments collapse, entire industries go on strike, whatever. However, with a strong connection to reality and an eye to the future, well-functioning governments can do their best to try and anticipate what their societies will want and need in the future and rather than react to crises, they might be able to cut a route into their ever-uncertain futures.

That about does it for the economic role of government—for now! Luckily, for those of you just itching for more, there’s an entire framework in THEE on the topic, or feel free to make comments or ask questions.

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About Me

Tom Kershaw

Hi! I'm Tom and I am a full-time writer, musician, and father to a firecracker of a four year-old. My wife and I lease our house and cars from her in hopes that her considerable talents of mess-making, princess-impersonation, and stuffed animal-whispering will pay off and fund our eventual retirement in the south of France.